| A one-day stock price decrease isn't the news. Zynga was in a very special place at a very special time. Social gaming had an amazing stretch of months, but that time seems to have passed, at least in terms of being on fire. Zynga's relationship with Facebook is really the only thing that set them apart. Innovative games? They took the same game and kept reskinning it. When that fizzled out, they began copying other games wholesale. (lol at a title of theirs I saw recently: "Scramble with Friends") They're not a gaming company, but did a pretty good job of looking like one and getting paid in the process. However, going public was dumb. They should have piled up cash and kept it all to themselves. Going public is meant for companies that are capable of being in it for the long haul. Not for companies that have figured out how to be successful in an industry that didn't even exists two years prior. Zynga can probably transition into other areas, like mobile games, online gambling, etc. However, they are just one of many in that space. They have no secret sauce or magic. They can probably turn a profit, but nothing that can bring their stock price back to where it was. The only ones who care how Zynga does are the crazy ones that hold ZNGA. Otherwise, they're just another gaming company right? If you do hold ZNGA, well, that sucks. Not a "sad set of circumstances" suck. More like "I blew my money on a Vegas weekend" suck. |
As far as Facebook. This news is great. It gives confidence to investors that they don't need Zynga to do well in terms of revenue. (Although they should have already knew that).